Budgeting / Personal Finance

How to Save for an Emergency Fund

With the economy in the shape it is in right now, everybody, and we mean everybody, must have an emergency fund.  What’s an emergency fund?  It’s basically the more adult concept of the piggy bank you had as a child.  You put all of your pennies into the piggy bank, and if a big expenditure came up, you’d break the piggy bank and have a lot of pennies available for the spending.

The adult version is a little less romantic, but arguably much more important.  An emergency fund will help you pay your bills or your house payment if you find yourself saddled with an unexpected expense or stuck staring at a pink slip. And, what’s the best part?  You don’t even have to do a lot of work to have an emergency fund.  We’ve compiled a list of simple tips for you to be able to start putting money away for this all-important fund: trust us, if a scenario ever pops up where you’re in need, you’ll be grateful you have it.

  • Sell items. If you have junk in your trunk of the materialistic sort, consider selling it on an auction site such as eBay.  You can also look into selling your old jewelry for cash – this has become very popular since the recession and is a good way to get money for items that rarely see the light of day.
  • Find a part-time job. If you simply don’t have the time or energy for an hourly wage-based job, try your hand at freelancing with your writing, website-building, or digital art skills.  Also try checking your local Craigslist or town newspaper for spot jobs.  You might be surprised with how much money you can make this way!
  • Don’t spend too much. Sounds simple, but, really, think about it.  Do you need that morning latte every day?  Do you need the deluxe cable package?  Can you carpool with a friend to work and save on gas?  Start parsing your daily life into “needs” and “wants,” and you’ll be amazed by how much you can save.
  • Pay attention to the thermostat. Even lowering it by two or three degrees in the winter will add up.  You’ll barely notice the difference – just wear a sweater.
  • Save your pennies. You know the piggy bank analogy we brought up at the beginning of the article?  Channel your inner kid again and start saving up your nickels, dimes, and quarters.  Keep a “change bowl” next to where you toss your keys after you get home, and start collecting all the spare change you usually let rattle around in your car or drop carelessly onto the street.  You can save hundreds of dollars this way – and it requires basically no change to your lifestyle!

Be sure to actually sock away the money you save for a rainy day.  While it might be tempting to go out and buy yourself something nice as a reward for being so frugal, you’ll want the emergency fund.  Trust us – emergencies happen.  You need to be prepared for when they do.